Government Committee wants National Entrepreneurship Mission, recommends $ 1 bn fund of funds

A committee created by the Planning Commission of India to create a vibrant entrepreneurial ecosystem in India has released its report which recommends steps that the government and ecosystem players need to take.

Alok Mittal, Managing Director of Canaan Partners and a member of the committee shared the report with Pi earlier. Here are the recommendations made by the committee

Key recommendations

Catalytic government policy and regulatory framework

• Facilitate investment flows in early stage ventures by angels and venture capital; consequent incentive structures and easing of investment norms

• Enhance incubator capacity – aim at 1000 operating incubators over next ten years

• Set up STPI like structures for early stage businesses enabling single window approvals, self regulation and self compliance

• Provide a framework for easier exits for early-stage investors

• Provide expeditious procedures for closing businesses

Easy access to equity capital and debt

• Create new sources of capital for domestic VCs such as pension funds,insurance companies, financial institutions, and NRIs (through automatic route)

• Establish Rs. 5000 crore sovereign “fund-of-funds” mandated to make anchor investments in diverse early stage VC funds with participation of other investors – with a multiplier effect

• SIDBI should provide risk capital and equity linked products to MSMEs directly as well as indirectly through banks and Alternate Investment Funds

• Enhance and make venture debt and credit guarantees more widely available – emulation of SIDBI like schemes by the banking sector; early stage lending focused NBFCs; promotion of UNIDO like mutual credit guarantee schemes Businesses as entrepreneurial hubs

• Active participation of private sector in setting up and operating
incubators including PPP models

• Industry associations and chambers of commerce to set up mechanisms for mentoring relationships between established businesses and early stage ventures

Promotion of entrepreneurship over careerism

• Include “entrepreneurship” and related skills in curriculum
• Enhance linkage between educational institutions and entrepreneurial ecosystem – for example, visiting faculty with entrepreneurial background
• Create mechanisms for commercialization of research through
entrepreneurship

Adequate and effective collaboration forums

• Establish online portal for comprehensive information on statutory compliances for setting up and operating a business
• Set up collaborative forums for mentorship and networking

…and here is the complete report.

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